Ramona Company has the following labor-related data: Standard labor hours for output: 15,000 hours Standard labor rate: $10 per hour Actual labor rate: $8 per hour Actual labor hours: 17,500 hours Given this data, which one of the following would be included in the single journal entry needed to record Wages Payable and the labor variances? a. credit Labor Efficiency Variance for $25,000 b. debit Labor Rate Variance for $35,000 c. credit Wages Payable for $175,000 d. debit Work-In-Process Inventory for $140,000 e. credit Labor Rate Variance for $10,000 f. credit Labor Rate Variance for $35,000 g. credit Labor Efficiency Variance for $10,000
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Ramona Company has the following labor-related data:
Standard labor hours for output: 15,000 hours
Standard labor rate: $10 per hour
Actual labor rate: $8 per hour
Actual labor hours: 17,500 hours
Given this data, which one of the following would be included in the single
a. credit Labor Efficiency Variance for $25,000
b. debit Labor Rate Variance for $35,000
c. credit Wages Payable for $175,000
d. debit Work-In-Process Inventory for $140,000
e. credit Labor Rate Variance for $10,000
f. credit Labor Rate Variance for $35,000
g. credit Labor Efficiency Variance for $10,000
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